Opposing view on fiscal reform: Address health care costs

By Paul Ryan

December 5, 2010

The Fiscal Commission has been a success. Due in large part to the leadership of co-chairmen Erskine Bowles and Alan Simpson, the commission’s deficit-reduction proposal has launched a critical debate about the biggest problem facing this country: how to get the federal government’s fiscal house in order and ensure a growing and prosperous future.

Tasked with an extraordinarily difficult challenge, the co-chairmen put forth a serious and credible plan aimed at reducing deficits.

Unfortunately, this plan failed to address the runaway costs of our health care entitlement
programs, which is the crux of the debt threat. In fact, this plan would take us in the wrong direction on health care with a tax change that would force more people away from their employer plans and onto the Democrats’ newly created government system. Instead of tackling the explosive growth of health entitlement spending, it embraces this new government-run health system and expands it.

The commission’s plan also relies too heavily on tax increases, which would stifle growth and prosperity. It masks its emphasis on higher taxes by using the president’s policy preferences as a baseline. A more realistic approach would use a current policy baseline. Some of the plan’s tax recommendations would result in a more efficient code with lower rates and a broader base. We should build on these good ideas, but we cannot accept that permanently higher taxes should be America’s “new normal.”

Erskine Bowles rightly declared: “The era of deficit denial is over.” Those who refuse to confront the looming fiscal crisis have nowhere to hide. The deficit debate is not merely an exercise in arithmetic. It is also a conversation we need to have about the proper size, scope and role of our government. Despite its flaws, the report contains a host of positive reforms that I’m eager to build upon, along with other solutions, when we write next year’s budget — drawing upon the inspired leadership of the co-chairmen.